Championship Subdivision Football | FCS Football | Stadiums | Blogs | Forums

Amid these conflicts and debates, the fundamental founding myth of U.S. global economic policy—that America’s major trading partners were all dedicated in principle to free trade, and were all playing essentially the same game—was maintained. As a policy matter, no difference was recognized between the mercantilist catch-up strategy of a Japan and the largely laissez-faire strategy of a Great Britain. If there were problems, the cognoscenti were convinced that it had to be because all markets had not yet been sufficiently opened. Thus the recipe was to negotiate yet more free trade deals to tear down those hidden barriers. More deals were also seen as a way to strengthen U.S. alliances. This caused complications, because trade deals meant primarily to cement alliances had to be sold to Congress as aimed at opening foreign markets and creating good jobs for Americans. Consequently, the proposed new deals were always presented as the means to reduce trade deficits and create millions of jobs while checking the Soviet Union and China.

While orthodoxy reigned in the negotiating chambers, questions began to arise from some halls of academe around 1980. Young economists like Paul Krugman, James Brander, and Joseph Stiglitz noted that much of world trade was operating outside the theory. Krugman emphasized that this was because the theory rested on a host of now completely unrealistic assumptions—perfectly competitive markets (like commodities such as coffee or wheat), full employment, fixed exchange rates, no economies of scale, no cross-border flows of capital and technology, no costs for closing factories or switching to new industries, no government subsidies or industrial policies, and constantly balanced trade. He particularly focused on the fact that in reality economies of scale not only exist but are a driver of trade flows as or more important than land, labor, and capital in major industries such as aircraft, steel, and autos. For incorporating economies of scale into the standard trade model, Krugman was eventually awarded the Nobel Prize in economics......

At this point, it is clear that some of the most high-profile pro–free trade thought leaders have changed their minds. The über-globalist and New York Times columnist Tom Friedman has recently said that “free trade with China has hurt more people than originally thought.” Krugman has also acknowledged that he didn’t anticipate the extent of the impact of trade with China on the American workforce. And the longtime orthodox trade champion and former Treasury Secretary Larry Summers is now calling for “harmonization” rather than more “globalization.”

More important, the public has caught on. Trump and Bernie are resonating with the American people because many of them feel in their bones that their future is being stolen by a combination of inadequate trade deals and excessive care for allies at their expense. That feeling won’t pass with the election. The new president will have to redo the old trade-off. The days of unilateral American free trade for unilateral U.S. security guarantees may at long last be ending, but a new strategy is needed.

93henfan wrote:I'm glad the PhD's are finally figuring out what the rest of us knew twenty years ago.

Ibanez wrote:

93henfan wrote:I'm glad the PhD's are finally figuring out what the rest of us knew twenty years ago.

You mean they weren't surprised when overnight, orders at manufacturing plants disappeared? They weren't tipped off when entire towns went belly up due to the only industry in town lost it's business to the Chinese.

I'm shocked. SHOCKED!

It is important to understand that from the early 1800s until about 1932, America specifically rejected free trade. Washington and Hamilton were protectionists, as was Lincoln. Teddy Roosevelt famously wrote, “Thank God I am not a free trader,” and Wilson squeezed the last penny out of Great Britain during World War II. So the United States got rich as a disciple of mercantilism.

93henfan wrote:

Ibanez wrote: You mean they weren't surprised when overnight, orders at manufacturing plants disappeared? They weren't tipped off when entire towns went belly up due to the only industry in town lost it's business to the Chinese.

I'm shocked. SHOCKED!

Hey, you're missing the multicultural benefits of all of this. My father would have never had the chance to meet a Malaysian if he hadn't been made to train them on operations at the Playtex plant in Dover before they had him ship all the machinery to Malaysia and laid him off with 40 years of service and closed the Dover plant.

Ain't America and free trade just fucking awesome?

93henfan wrote:

Ibanez wrote: You mean they weren't surprised when overnight, orders at manufacturing plants disappeared? They weren't tipped off when entire towns went belly up due to the only industry in town lost it's business to the Chinese.

I'm shocked. SHOCKED!

Hey, you're missing the multicultural benefits of all of this. My father would have never had the chance to meet a Malaysian if he hadn't been made to train them on operations at the Playtex plant in Dover before they had him ship all the machinery to Malaysia and laid him off with 40 years of service and closed the Dover plant.

Ain't America and free trade just fucking awesome?

Ibanez wrote:

It is important to understand that from the early 1800s until about 1932, America specifically rejected free trade. Washington and Hamilton were protectionists, as was Lincoln. Teddy Roosevelt famously wrote, “Thank God I am not a free trader,” and Wilson squeezed the last penny out of Great Britain during World War II. So the United States got rich as a disciple of mercantilism.

Wilson? WW2?

GannonFan wrote:

Ibanez wrote: Wilson? WW2?

Heck, arguing economic theory today based on the economic situation confronted by Hamilton (i.e. colonial economic system tilted towards Britain and with prior restraints against certain types of industry) is not exactly a straightforward endeavor.

Basically a weird article that seems to blast free trade because it never lived up to the word "free". I agree that geo-political considerations certainly played into past free trade decisions and as a result, could certainly work economically against the US. But the advantage of free trade that the author seems to miss can be seen in the outcome of the Japanese economy that he seems to tout in the article. He makes a great deal of positive praise for how Japan got the US to open their markets to Japan without Japan needed to open it's own, but then he misses the rest of the story of how Japan's own economy crashed brutally in the 90's and has never really recovered, as we're at least two decades into crippling deflation in Japan with no real way out (I think they have debt something like 250% of GDP and with an aging and declining population no real good way to fix that). Japan's coddling and protection of their markets led to substantial weakness in many parts of their economy and the bad fruit that should've withered on the vine and failed instead were propogated and kept alive by Japanese policies, only to fail with even greater impact years down the road.

The article gets it right in that we should be more adamant to point out and correct other countries when they stray too far in terms of protecting their own interests. But that's a policy we need to be careful with regarding ourselves as well. Coddling our own markets and our own industries too far will invariably lead to worse outcomes somewhere in the future. Mercantilism isn't the answer, as blind faith in free trade isn't either. Vigilant free trade, however, with a healthy dose of innovation runs a better chance of working.

ASUG8 wrote:Check out this pics in this link. My first job out of college was working on the top floor of this building, which at the time was either the largest or second largest textile manufacturer in the world. Today, it's a shopping center and the company today is a shadow of its former self. NAFTA orginally sent much of the manufacturing to Mexico before the Chinese lowballed the Mexicans and captured the industry. Glad I got out when I did.





http://www.greensboro.com/gallery/frien ... 0da15.html

Grizalltheway wrote: Their coat factory rocks! And it's more than great coats!

GannonFan wrote:

Ibanez wrote: Wilson? WW2?

Heck, arguing economic theory today based on the economic situation confronted by Hamilton (i.e. colonial economic system tilted towards Britain and with prior restraints against certain types of industry) is not exactly a straightforward endeavor.

Basically a weird article that seems to blast free trade because it never lived up to the word "free". I agree that geo-political considerations certainly played into past free trade decisions and as a result, could certainly work economically against the US. But the advantage of free trade that the author seems to miss can be seen in the outcome of the Japanese economy that he seems to tout in the article. He makes a great deal of positive praise for how Japan got the US to open their markets to Japan without Japan needed to open it's own, but then he misses the rest of the story of how Japan's own economy crashed brutally in the 90's and has never really recovered, as we're at least two decades into crippling deflation in Japan with no real way out (I think they have debt something like 250% of GDP and with an aging and declining population no real good way to fix that). Japan's coddling and protection of their markets led to substantial weakness in many parts of their economy and the bad fruit that should've withered on the vine and failed instead were propogated and kept alive by Japanese policies, only to fail with even greater impact years down the road.

The article gets it right in that we should be more adamant to point out and correct other countries when they stray too far in terms of protecting their own interests. But that's a policy we need to be careful with regarding ourselves as well. Coddling our own markets and our own industries too far will invariably lead to worse outcomes somewhere in the future. Mercantilism isn't the answer, as blind faith in free trade isn't either. Vigilant free trade, however, with a healthy dose of innovation runs a better chance of working.

Cluck U wrote:

GannonFan wrote:
Heck, arguing economic theory today based on the economic situation confronted by Hamilton (i.e. colonial economic system tilted towards Britain and with prior restraints against certain types of industry) is not exactly a straightforward endeavor.

Basically a weird article that seems to blast free trade because it never lived up to the word "free". I agree that geo-political considerations certainly played into past free trade decisions and as a result, could certainly work economically against the US. But the advantage of free trade that the author seems to miss can be seen in the outcome of the Japanese economy that he seems to tout in the article. He makes a great deal of positive praise for how Japan got the US to open their markets to Japan without Japan needed to open it's own, but then he misses the rest of the story of how Japan's own economy crashed brutally in the 90's and has never really recovered, as we're at least two decades into crippling deflation in Japan with no real way out (I think they have debt something like 250% of GDP and with an aging and declining population no real good way to fix that). Japan's coddling and protection of their markets led to substantial weakness in many parts of their economy and the bad fruit that should've withered on the vine and failed instead were propogated and kept alive by Japanese policies, only to fail with even greater impact years down the road.

The article gets it right in that we should be more adamant to point out and correct other countries when they stray too far in terms of protecting their own interests. But that's a policy we need to be careful with regarding ourselves as well. Coddling our own markets and our own industries too far will invariably lead to worse outcomes somewhere in the future. Mercantilism isn't the answer, as blind faith in free trade isn't either. Vigilant free trade, however, with a healthy dose of innovation runs a better chance of working.

So, what you are saying is that we need to make better deals.

GannonFan wrote:

Cluck U wrote:
So, what you are saying is that we need to make better deals.

Yes, yes we do. Without going so crazy in our favor that we overprotect our market and prop up and save businesses/markets/policies that otherwise wouldn't be efficient enough to survive under normal competition. We don't need to repeat the mistakes Japan made that got them into their deflation mess in the first place. And that's a real danger, we try to fix what's broken and we go too far to the other extreme.

kalm wrote:

GannonFan wrote:
Yes, yes we do. Without going so crazy in our favor that we overprotect our market and prop up and save businesses/markets/policies that otherwise wouldn't be efficient enough to survive under normal competition. We don't need to repeat the mistakes Japan made that got them into their deflation mess in the first place. And that's a real danger, we try to fix what's broken and we go too far to the other extreme.

Nice to see you coming around, Ganny!

GannonFan wrote:

kalm wrote:
Nice to see you coming around, Ganny!

It's where I've always been, and truth be told, it's what free trade is really supposed to be. Bad trade deals are bad trade deals no matter what economic theory you try to label it as. And rampant protectionism, which is what Bernie and Trump have been pushing (well definitely Bernie, Trump is more amorphous on that) is the wrong answer. Telling the world we're going to screw them and they need to get in line to be screwed is not a workable solution. I'm sure you're not for rampant protectionism, though, right???

kalm wrote:

GannonFan wrote:
It's where I've always been, and truth be told, it's what free trade is really supposed to be. Bad trade deals are bad trade deals no matter what economic theory you try to label it as. And rampant protectionism, which is what Bernie and Trump have been pushing (well definitely Bernie, Trump is more amorphous on that) is the wrong answer. Telling the world we're going to screw them and they need to get in line to be screwed is not a workable solution. I'm sure you're not for rampant protectionism, though, right???

Apology accepted!

Better not let JSO see this...he might have to do some more numbers crunching.

JohnStOnge wrote:

Better not let JSO see this...he might have to do some more numbers crunching.

No I'll wait until the next time CBO does an analysis of inflation adjusted incomes by quintile, etc., with enough detail to make the point. But there won't be a change in the picture. The data will still show that Americans in every quintile are materially better off now than they were in the "glory days" prior to the movement of a lot of manufacturing to other countries and more free trade. My guess is it'll show people are not as well off as they were in like 2007...there will have been a dip...but even with the dip they data will still indicate that they're a lot better off in material terms now than they were back in the days where people think everything was just SO swell.

The data will still show that the idea that we are worse off now is a myth, but people will believe the myth anyway.

I'll say it again: I can't believe anybody that was alive back in those "glory days" thinks the typical American was better off then. It's just completely unreasonable to think that.

GannonFan wrote:

kalm wrote:
Apology accepted!

I'm glad to know you backed down from your support of Trump on economic measures. You're a big guy for admitting you were wrong.

kalm wrote:

GannonFan wrote:
I'm glad to know you backed down from your support of Trump on economic measures. You're a big guy for admitting you were wrong.

Making **** up rather than face the music. How unlike you!

kalm wrote:
And once again, you ignore hyperinflation of key areas like healthcare, home prices, and education.

Also, how do household debt and savings compare to the golden age?